Auto increases on credit limits set investors back

By AB,Aidan Devine | 30 Mar 2013

Loan applicants continue to be haunted by poor credit card decisions, even though national credit card debt is slowing, Melbourne broker Marios Rokka says.

Rokka says he’s seen many home loan applications adversely affected by clients who accepted seemingly innocent credit card limit increases.

“Automatic credit card increases are common these days, but [they] can have a big impact on your borrowing power, especially when you don’t use the limit you have been granted,” he says.

Rokka’s observations follow reports that the value of national credit card debt has fallen from more than $50bn last year to $48.7bn.

The availability of debit cards, where users spend their savings rather than relying on credit, and technology changes have been lauded as reasons for the shrinking credit card debt.

Rokkas points out that a $10,000 credit card limit, for instance, can reduce a person’s borrowing limit by up to $30,000.

“When you’re going through a home loan application, lenders are going to look closely at your savings and income, but they also place a huge emphasis on the amount of credit you have available, which could potentially affect your ability to make future repayments.”

Top Suburbs : menai , st kilda west , padbury , goulburn , eagle vale


Get help with your investment property

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local mortgage broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus an appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here